India could show further signs of economic recovery when it reveals its growth figures for the October to December quarter on Wednesday.
Economists polled by Reuters predicted that India's GDP grew 6.9 percent year on year for the three months ended December.
If that number is realized, the country would notch its fastest growth rate for the calendar year 2017, following the 6.3 percent achieved in the July to September quarter. India's fiscal year runs from April to March.
Market watchers said that the December quarter growth was likely driven by increased consumption and higher exports. The uptick in inflation had little impact on household spending for the quarter while growth in the agriculture sector likely slowed, they said.
"From an expenditure perspective, consumption and external demand picked up further while private capex remained sluggish," economists at Morgan Stanley wrote in a recent note. The investment bank also predicted that GDP grew by 7 percent on-year for the December quarter, a touch above the market consensus.
They said that growth in the industry and services sector likely accelerated while the agriculture sector slowed. Meanwhile, corporate revenue trends likely improved further in the quarter, the economists added.
The Reuters poll also predicted that India's gross value-added — another metric used to measure growth — rose 6.6 percent year on year for the December quarter.